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Looking for market momentum? ICICI Prudential's new fund may be the answer
At the heart of the fund is a unique approach that blends price momentum with earnings momentum, setting it apart from traditional momentum strategies that rely solely on technical price patterns.
'We aim to approach momentum in a fundamental manner by focusing on earnings and estimates momentum, complemented by price momentum,' said Sankaran Naren, Executive Director & Chief Investment Officer, ICICI Prudential AMC. 'India's equity market is diverse, and this strategy allows the fund to flexibly move across sectors and market caps to harness emerging trends.'
What Is Momentum Investing?
Momentum investing is a strategy that targets stocks already on an upward trend, betting that their momentum will continue in the near term.
ICICI Prudential's approach incorporates two distinct forms:
Price Momentum: Focuses on stocks that are already rising in price based on technical factors and market sentiment. While effective in the short term, it can be susceptible to sudden trend reversals.
Earnings Momentum: Selects stocks with rising earnings estimates or improving analyst ratings—suggesting that the upward trend is supported by improving fundamentals. This is considered more sustainable over time.
How the Fund Identifies Momentum
The fund uses a hybrid strategy—combining top-down macroeconomic views (sector, policy, interest rate trends) and bottom-up stock analysis (earnings revisions, margins, operational metrics) to identify opportunities.
Example: The IT sector historically showed strong stock performance that tracked earnings growth. Similarly, NBFCs showed price volatility based on interest rate cycles—highlighting how macro and micro trends influence momentum.
Why Consider This Fund?
ICICI Prudential Active Momentum Fund offers flexibility on multiple levels:
Moves across sectors – Captures trends wherever they emerge, from tech to industrials.
Adaptable investment style – Automatically pivots between growth, value, or quality depending on what's leading the market.
Cross-market cap flexibility – Momentum can occur in large-cap, mid-cap, or small-cap stocks, and this fund is built to chase those trends.
Dual analysis model – Combines top-down macro insights and bottom-up stock selection for diversified exposure.
Key Details
:
· Name of Scheme: ICICI Prudential Active Momentum Fund
· Type: An open ended equity scheme following momentum theme
· Benchmark Index: Nifty 500 TRI
· Minimum Application Amount: ₹5,000 (plus in multiples of Re. 1)
· Minimum Additional Investment: ₹1,000 (plus in multiples of Re. 1)
· Exit Load: 1% of applicable NAV for redemptions within 12 months; Nil thereafter
· Fund Managers: Ms. Manasvi Shah and Ms. Sharmila D'silva (overseas investments)
The Active Momentum Fund's focus on sustainable trends driven by real earnings growth, coupled with the ability to move dynamically across styles and sectors, aims to give investors the edge they need to stay ahead of the curve.
As always, potential investors should assess their risk appetite and investment horizon before making any decisions.
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